Parents Are Footing the Student Loan Bill

Parents aren’t just helping their kids cover the cost of college before they attend, but after they graduate as well.

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Thirty-six percent of parents expect to pay some or all of their child’s student loans, according to a College Ave Student Loans survey. Even as parents serve as student loan cosigners for their children.

Mounting student loan debt is holding young people back from buying homes or saving for emergencies. And they’re also hurting parents. Thirty-nine percent say paying back student loans is more stressful than mortgage payments, according to the survey. Even more, 32 percent say paying for college causes more strain than paying for credit cards.

College Ave says parents should consider how everyone will contribute to paying back the loan once repayment begins.

“Weigh the credit impact of a parent or student loan,” the report says. “If you are both named on the loan — you’re both equally responsible — so payment history (the good or bad) will affect the credit record of both parent and child.”

Future earnings matter in the present

If you’re thinking about taking out a loan with your child now, one of the best ways to avoid paying a lot back later is to take out less to begin with.

College Ave says to consider your child’s income after they graduate so you can budget monthly dues accordingly.

“Don’t have your child take out more in student loans than they expect to earn his or her first year out of college,” the survey suggests.

But don’t just think about the monthly payments — the total life of the loan matters, too. Even if you’re paying the minimum monthly requirement, interest adds up and can tack on thousands of extra dollars once you’ve paid off the loan. For many families, those extra dollars just aren’t there.

What you’re losing when you pay that loan

While you might feel obligated to help your child pay their student loan debt — especially if keeping your credit score up is a motivating factor — you might want to think about what that money would’ve gone to instead. Like your retirement.

Most people don’t know how much they’ll need for retirement and expect to work long into their golden years. The more money you’re putting toward your child’s education — before or after they graduate — the less you’re contributing to yourself. This means you’re going to work longer.

Luckily, there are a few steps to take to make sure you’re able to help your kid and yourself at the same time, like:

Budget for both. Review how much your child will earn — even conservatively — and make sure they contribute to the costs. You can adjust your retirement contributions a little, if necessary, but try to find other places to cut corners instead.

Set deadlines. After graduation, make sure your grown kid is paying on time. Even if they are paying you, it helps everyone involved if they don’t fall behind. It’ll also teach them responsibility when other bills are due, and creditors aren’t as friendly as parents.

Make repayment a plan. Paying back student loans can be stressful. Regardless of how you help your child pay back student loans, make sure you have a plan in place so you aren’t punishing yourself later on in life.

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Originally published at on August 28, 2018. helps people with credit card debt, tax debt, student loans debt, credit report errors, ID theft issues, bankruptcy & more!

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